A CRAFTY APPROACH TO PRIVATE LABEL ALCOHOL

LONDON – Monday, 29 September 2014 – Opportunistic retailers are striving to add credibility to private label (PL) alcohol by pushing the boundaries of quality, value, and consumer expectations. This is timely news given Datamonitor Consumer’s recent research showing that this sector has the lowest level of consumer sentiment in the FMCG space.

Only a third of consumers say that PL alcoholic drinks are good alternatives to name brands; leagues behind the food, non-alcoholic drinks, and household cleaning markets. Yet a mere 8% of consumers globally say that a brand’s advertising, image, or sponsorship would encourage them to pay more for their most often consumed alcoholic drink. If not image then, what is it that holds PL alcohol back?

Sara Grady, an Analyst at Datamonitor Consumer, notes: “While recent moves by key retail players can be expected to change the low acceptance of private label alcoholic drinks, there is clearly a deep-rooted disparity between acceptance of private label alcohol and willingness to actually pick up the bottle.”

So brand perception does play a role; consumers may not pay more based on image, but similarly, they are not prepared to forgo such branding and potentially pay less.

“Retailers are starting to encourage the purchase decision, catching up with other highly-evolved PL sectors by side-stepping the ‘image issue,’” explains Grady. “The ill-defined craft trend is, for example, certainly giving mileage in beer and cider across the globe as retailers launch “authentic-looking” products that consumers presume to be craft beers, not private labels.”

Datamonitor Consumer’s research also shows that those who agree that PL alcoholic drinks are fair brand alternatives are more likely to prefer drinking at home than out at bars, clubs, and restaurants.

“The stronger preference towards drinking at home for ‘PL consumers’ suggests that stigma does still surround the sector,” says Grady. “Moreover it actually hints at the types of alcohol such consumers might be buying. Less confident drinkers may find comfort in trusting their retailer’s label and indicates another trend for private label alcohol to capitalize on, rather than shy away from.”

For more information on trends within the private label sector, the full report, Datamonitor Consumer’s Trendsights: Private Label Evolution, is available for purchase at: http://www.datamonitor.com/store/Product/?productid=CM00288-003